What Products Will Appear in Fintech in the Near Future?
The rapid development of technology dramatically affects the financial sector and fintech solutions. This forces it to change much faster and more actively, which sometimes leads to the destruction of traditional approaches and systems.
The needs and desires of customers largely determine the future of fintech. The main issues remain professional analytics, process optimization, security and fraud protection. The trends we will discuss below help to address these challenges. So let’s discuss how it impacts the industry and how business owners can keep up with such changes.
Neobanks
Neobanking is one of the most popular and promising areas of fintech, which has radically changed banking. According to Statista research, neobanking market size will grow at an annual average rate of 53.4% and reach a value of 2.05 trillion U.S. dollars by 2030.
Neobanks are financial institutions that provide fake services exclusively on the Internet. Unlike digital banking, they have no physical offices and are 100% independent.
The popularity of such products is growing, especially with the beginning of the pandemic, because they allow clients to get all the necessary services without leaving home: open an account, get a loan, transfer funds, etc. This approach significantly reduces bureaucratic processes and eliminates the need for the client to fill out an endless number of documents.
Neobanks also provide a high level of process automation, lower interest rates and commissions, and the ability to receive real-time data about their finances. In addition, they offer a personalized customer experience (cost accounting tools, customer account data visualization, etc.).
This business model looks much more modern and promising than cumbersome traditional banking. Therefore, neobanks are the future of finance, and they are sure to become more popular and in demand.
AI-powered Finance Assistants
Artificial intelligence and machine learning are two things that radically change the future of fintech industry and all of humanity. In the field of financial services, AI is the best analytical tool that sharpens financial modeling, reveals all possible patterns of complex economic networks, and analyzes huge amounts of data in minutes. It also is used for prediction analysis, creating security and privacy systems, fraud detection, etc.
AI-powered finance assistants are another opportunity to improve the customer experience, provide personalized services and simplify the financial institution’s operation. They not only reduce the human consultants’ workload but also enable them to pay more attention to processes that require exclusively human intervention.
The AI system quickly analyzes the client’s behavioral pattern, available information about it and provides a list of the most needed services. Such an assistant can choose the best loan terms, create an investment plan, and provide advice on any financial issue.
Thus, fintech companies will pay more attention to machine learning algorithms and use AI as a competitive advantage in the future.
Invisible Forms of Identification
Customer identification is a key issue for any financial institution. It’s important for account security, fraud prevention, and the bank’s reputation. Every fintech software development agency pays special attention to this problem.
This process used to take a lot of time, as ID’s inspection was carried out manually by the staff. Today, fintech allows you to create accounts without verifying KYC or identity documents through invisible forms of identification. Fintech software developers work hard in this direction, and it can dramatically change the field of fintech.
Robotic Process Automation (RPA)
Robotic process automation, or RPA, is about using digital robots to optimize workflows in a financial institution. Most often, bots are involved in this process, and they perform routine tasks and repetitive actions. Robots are used when you don’t need to apply AI with complex algorithms, and the procedures are simple, like standard calculations, simple data processing, etc.
RPA technology also affects the future of fintech, as it allows you to free up resources and direct them to perform more critical tasks, on the one hand, and significantly increases accuracy, on the other. This can substantially reduce operating costs and improve the back-office operation. Therefore, this tool will definitely be developed and actively used in the coming years.
Biometric Security
Biometric technology in fintech is shaping the future of banking, and this is one of the main breakthroughs in financial security and fraud protection. Such verification is convenient, effective, and, last but not least, user-oriented.
Biometrics seems to do the impossible: it simplifies access to the account for users, making it more difficult for attackers. It is actively used to change passwords, settings, authenticate online transactions, manage finances, etc.
The best-known options for biometric authentication are fingerprint scanners and face recognition, and voice recognition technologies are also often used. Developers are talking about introducing new biometrics security systems with pro retinal scanning and iris recognition. In the future, the authentication process could be based even on analyzing patterns of veins on the user’s palms.
In other words, biometric authentication creates a radically new financial security system because instead of passwords and PIN codes, a completely unique way of customer identification is used. It cannot be stolen, replicated, or forged.
Conclusion
Fintech is developing really fast because the market evolution is no less rapid. New trends are formed every year, and one player can dramatically change the whole game. However, understanding the fundamental changes and the main directions of field development allows the business owners and CEOs to have a clear understanding of the industry, find ways to stay ahead of competitors, and make effective decisions for company’s future.
So, you should pay attention to key technologies: biometric security, artificial intelligence, neobanking, invisible form of identification and robotic process automation. They are increasingly integrated into modern systems and create a solid basis for innovation implementation.
Those who are able to make greater use of new technologies and their capabilities can independently create a competitive environment, form radically new values and efficiently allocate resources. The financial industry will definitely change, possibly by destroying traditional approaches. So you need to update your product and make timely changes in order to remain an integral part of the financial industry.
